West Virginia Congress Considering Much Needed False Claims Act

A new bill is making its way through West Virginia’s congressional committees in hopes of providing protection to whistleblowers at the state level. HB4001, or the False Claims and Taxpayer Protection Act of 2014, seeks to help the State of West Virginia’s whistleblowers.

The West Virginia law is designed to encourage whistleblowers to come forward and report their knowledge of entities causing the state government to knowingly pay false claims. The bill further gives authority to the state Attorney General to investigate such reported fraud.

West Virginia’s False Claims bill is modeled after the Federal False Claims Act. The Federal False Claims Act enables whistleblowers to file lawsuits on behalf of the government under what is commonly referred to as its qui tam provision and potentially share in any award or recovery.

Proponents of the West Virginia whistleblower law project that its passage may bring in as much as an additional $90 million a year for the state. Those funds could be earmarked for city improvement and repair, elderly care, and volunteer efforts in the city.

The bill has to overcome some legislative hurdles before it will be passed into law, however. Opposers of HB4001 are concerned that the bill, in its current form, would open up the “floodgates” and drown state courts in frivolous litigation.

Passage of state false claims legislation would also open the state up to potentially increased federal benefits. According to the West Virginia Record, the state could be eligible for as much as a 10 percent increase in the funds it is awarded as part of federal false claims suits.

States currently receive “up to about 30 percent of recovered funds, while states that have false claims statutes approved by the federal government receive up to about 40 percent,” according to the WV Record.

Kentucky is also considering similar legislation at this time. The speaker of Kentucky’s House, Greg Stumbo, submitted legislation this past week.

“The positives of passing a false claims statute are clear for West Virginia and Kentucky,” Mr. Paulos added.“Whistleblowers are the best tool in preventing fraud… laws that encourage people to step forward and disclose fraudulent conduct help ensure that states do not continue to be victims of fraud against their government.”

Joshua is a writer and researcher with Ring of Fire. You can follow him on Twitter @Joshual33.